ERISA- Still Overwhelmingly Viewed As An Insurers Law

By Bonny Rafel

A recent article in the Wall Street Journal reports that “loopholes in a federal law intended to protect worker benefits” make it easy for insurers to make erroneous arguments with near impunity. On March 11, 2010, “Death of a loved one can be beginning of hard fight with life insurer”provided a sampling of recent cases where Metropolitan Life Insurance Company, the nations largest insurer, and Prudential, who advertises that it provides disability insurance to the most Americans, play hardball particularly with cases governed by ERISA, because the penalties for erroneous decision making is simply a slap on the wrist. The article reports “since 2008 federal judges have concluded that some insurers cheated survivors by twisting facts, fabricating excuses and ignoring autopsy findings to withhold death benefits.”
Unfortunately, under ERISA, employees have no rights to a jury trial and no rights to compensatory or punitive damages. The most the insurer can be forced to pay if they lose, is the benefits they should have paid in the first place and sometimes the counsel fees of the unfortunate claimant who had to hire legal counsel to fight the insurance company. Often the cases take up to two years or more to get to judgment in Federal Court. Meantime, the claimant suffers financial struggles they never imagined would occur when they were convinced to buy the policies from the insurers eager to take the premiums but so reluctant to pay, even bona fide claims without a long battle.